China's beverage giant Wahaha Group said yesterday that the company's
application for arbitration over a trademark dispute with its French partner
Danone, has been accepted by the Hangzhou Arbitration Committee.

The application asks the committee to terminate a trademark transfer contract
signed between Hangzhou Wahaha Group and the joint venture of Wahaha and Danone
in 1996, said Shan Qining, a spokesman for Hangzhou Wahaha Group.

Wahaha said its contract with Danone was never approved by China's trademark
authority, which means the transfer is invalid and thus the contract should have
terminated.

Shan said the Wahaha trademark belongs to Hangzhou Wahaha Group and not with
Danone.

Danone, which owns 51 percent stake of the 39 joint ventures, has accused
Wahaha of setting up independent companies and selling products identical to
those sold by the joint ventures.

Danone is demanding a 51-percent stake in the non-joint venture companies,
which Wahaha Group has rejected.

Danone filed its first lawsuit against Wahaha on May 9 in Stockholm.

On June 4, Danone filed a lawsuit in the Los Angeles-based Superior Court
against Ever Maple Trading Ltd. and Hangzhou Hongsheng Beverage Co Ltd, and two
individuals related to the companies.

Ever Maple Trading Ltd is the controlling shareholder of Hangzhou Hongsheng
Beverage, which is the parent company of Hangzhou Wahaha Food and Beverage Sales
Co, Danone's joint venture partner in China.

On June 6, Zong Qinghou, founder and chairman of Wahaha Group, resigned from
his post as chairman of its 39 joint ventures with Danone.